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– GIVOT OLAM OIL EXPLORATION )LIMITED PARTNERSHIP (1993 General Partner: GIVOT OLAM OIL LTD. Post Office Box 45121 5 Shlomo Halevy Har Hotzvim, Jerusalem 91451 בס"ד גבעות עולם חיפושי נפט - שותפות מוגבלת )(1993 שותף כללי: גבעות עולם נפט בע"מ ת.ח45121 . רח' שלמה הלוי 5 הר חוצבים ,ירושלים 91451 פקסFax: +972-2-535-3630 : טלפוןTelephone: +972-2-535-6315 : E-mail: [email protected] 22באוגוסט 2011 לכבוד לכבוד רשות ניירות ערך הבורסה לניירות ערך בת"א בע"מ רח' כנפי נשרים 22 רח' אחד העם 54 ירושלים באמצעות מערכת המגנ"א תל-אביב באמצעות מערכת המגנ"א הנדון :הגדלת הרזרבות המוכחות של השותפות א .ניתנת בזה הודעה כי על-פי דוח שהוכן על-ידי ) Baker RDS Limitedלהלן ("RDS" :המצ"ב ,ואשר הוכן על-פי כללי המערכת לניהול משאבי פטרוליום ) ,(SPE-PRMSהוגדלו רזרבות הנפט המוכחות 1 P -בשדה מגד מ 2.2-מליון חביות ל 2.6-מליון חביות )בשאר הקטיגוריות לא נעשה כל שינוי( .עדכון זה נעשה בעקבות הפקת נפט גם ממקטע 8bבמהלך שנת 2011שלא נכללה בדו"ח הרזרבות הקודם ליום ) 31.12.2010לפרטים ראו בדו"ח התקופתי של השותפות מיום .(31.5.2011 רזרבות הנפט בשדה מגד ,מסווגות כרזרבות שאושרו לפיתוח )(Approved for Development ובהתאם לדו"ח ,הינן כמפורט להלן: קטגוריית רזרבות סה"כ בנכס הנפט Mbbl רזרבות מוכחות 1P )(Proved reserves רזרבות צפויות * )(Probable Reserves 2.6 7.9 סה"כ רזרבות מסוג 2P 10.5 )(Proved+Probable Reserves רזרבות אפשריות * )(Possible Reserves 6.4 סה"כ רזרבות מסוג 3P ) Proved+Probable+Possible (Reserves 16.9 * ההצגה של סעיף זה בטבלה נעשית בהתאם להנחיית רשות ניירות ערך .השותפות בדיעה כי ההצגה הנכונה של הטבלה הינה ללא סעיף זה. – GIVOT OLAM OIL EXPLORATION )LIMITED PARTNERSHIP (1993 General Partner: GIVOT OLAM OIL LTD. Post Office Box 45121 5 Shlomo Halevy Har Hotzvim, Jerusalem 91451 בס"ד גבעות עולם חיפושי נפט - שותפות מוגבלת )(1993 שותף כללי: גבעות עולם נפט בע"מ ת.ח45121 . רח' שלמה הלוי 5 הר חוצבים ,ירושלים 91451 פקסFax: +972-2-535-3630 : טלפוןTelephone: +972-2-535-6315 : E-mail: [email protected] ״רזרבות אפשריות ) (Possible Reservesהן הרזרבות הנוספות אשר אינן צפויות להיות מופקות באותה מידה כמו הרזרבות הצפויות ) .(Probable Reservesישנו סיכוי של 10% שהכמויות שיופקו בפועל יהיו שוות או גבוהות מכמות הרזרבות המוכחות ),(Proved Reserves בצירוף כמות הרזרבות הצפויות ) (Probable Reservesובצירוף כמות הרזרבות האפשריות )".(Possible Reserves טבלה לעניין משאבים מותניםDevelopment Pending - קטגוריית המשאבים המותנים אומדן הכמויות הנמוך )(1C-Low Estimate האומדן הטוב ביותר )(2C-Best Estimate האומדן הגבוה )(3C-High Estimate סה"כ נפט קל גז נלווה Mbbl 31.9 59.9 90.1 MMCF 61,800 119,700 182,100 ״אין ודאות כי יהא זה אפשרי מבחינה מסחרית להפיק שיעור כלשהו מהמשאבים המותנים.״ ביחס לכמויות המופיעות בקטגוריה Cהרי שמספרים אלו מבטאים את הערכת המשאבים לגבי יתרת שדה מגד .המשאבים המותנים בקטגוריות 2C,1Cו 3C-מותנים בביצוע קידוחים נוספים ובשימוש בהם בטכניקת fracוהרמה מלאכותית ועל כך שייקדחו 13קידוחים נוספים בשטח הליבה בנוסף לקידוחי מגד 5,6ו 7-ובביצוע 27קידוחים מפיקים בשאר השדה .הכנת לוחות זמנים לביצוע קידוחים המאושרים על ידי הממונה או תכנית פיתוח לשדה מגד הכוללת ביצוע קידוחים נוספים בנוסף לקידוחי מגד 5,6ו 7-או הוכחת רציפות בין האזורים השונים בשדה מגד תאפשר מעבר של חלק מהמשאבים שבקטגוריה Cלקטגוריות 2Pו.3P-קידוחים ומבחנים מוצלחים נוספים נדרשים על מנת להגדיל את קטגורית .1P לגבי משאבי הגז צויין כי על מנת להעביר חלק מהמשאבים לקטגוריית הרזרבות נדרשים הסכמי גבעות עולם חיפושי נפט - שותפות מוגבלת )(1993 שותף כללי: גבעות עולם נפט בע"מ ת.ח45121 . רח' שלמה הלוי 5 הר חוצבים ,ירושלים 91451 בס"ד – GIVOT OLAM OIL EXPLORATION )LIMITED PARTNERSHIP (1993 General Partner: GIVOT OLAM OIL LTD. Post Office Box 45121 5 Shlomo Halevy Har Hotzvim, Jerusalem 91451 פקסFax: +972-2-535-3630 : טלפוןTelephone: +972-2-535-6315 : E-mail: [email protected] מכירה של הגז בדרך של המרתו לחשמל או בכל דרך אחרת וכן אינדקציה על הגז שישמש לצרכי הקידוח וכן של ההפרש בין הגז המןפק לגז הנמכר. בדו"ח תחשיב העתודות צויין כי לכמויות הנכללות בקטגוריות Pו C -יש פוטנציאל לגדול ככל שיקדחו עוד בארות בשדה ולאחר ביצוע מבחנים נוספים. עוד יצוין ,כי בתזרים המהוון נלקחו בחשבון התמלוגים כמפורט בסעיף 7.6.1בתשקיף השותפות מיום ,19.5.2009וכן היטל רווחי הנפט אשר יחול על השותפויות בהתאם להוראות חוק מיסוי רווחי נפט ,התשע"א) 2011-להלן" :החוק"( .יש להדגיש כי חישובי ההיטל נעשו על-פי ההגדרות ,הנוסחאות והמנגנונים המוגדרים בחוק כפי שמבינות ומפרשות אותן השותפות ,אך לאור חדשנות החוק ומורכבות נוסחאות החישוב והמנגנונים השונים המוגדרים בו ,אין כל בטחון כי פרשנות זו של אופן חישוב ההיטל תהיה זהה לזו שתאמצנה רשויות המס ו/או זהה לפרשנות החוק על ידי בית המשפט, אם וכאשר תובאנה סוגיות אלו להכרעתו .נכון להיום ,סוגיות אלו טרם נידונו בפסיקתם של בתי- המשפט בישראל .חישובי ההיטל נעשו בהתאם להוראות המעבר הקבועות בחוק בכל הנוגע למיזם שמועד תחילת ההפקה המסחרית חל לגביו לפני יום תחילת החוק ,ועל בסיס ההנחות שונות נוספות. אזהרה בגין מידע צופה פני עתיד – הערכות RDSבדבר רזרבות הנפט בשדה מגד ,הינם מידע צופה פני עתיד .ההערכות לעיל מבוססות ,בין היתר ,על מידע גיאולוגי ,גיאופיסי ואחר ,שנתקבל מהקידוחים בשדה מגד ועל תחשיב עלויות של הקידוחים ופעולות ההמרצה שיידרשו ועל מחיר חבית נפט ועל דו"חות שהוכנו עבור השותפות והינם בגדר הערכות מקצועיות של RDSושל כותבי הדו"ח הכלכלי ואשר לגביהם לא קיימת כל וודאות .עם זאת ,לאור מעמדה של RDSשהינה מהמובילות בתחום ביצוע הערכת עתודות ורזרבות של מאגרי נפט וגז טבעי ,אין לשותפות סיבה לערער על נכונות מסקנות דו"ח תחשיב העתודות והדו"ח הכלכלי המבוסס עליו. כמויות הנפט ,שיופקו בפועל ,עשויות להיות שונות מההערכות וההשערות הנ"ל ,בין היתר ,כתוצאה מתנאים תפעוליים וטכניים ו/או משינויים רגולטוריים ו/או מתנאי היצע וביקוש בשוק הנפט ו/או מהביצועים בפועל של המאגר .ההערכות וההשערות הנ"ל עשויות להתעדכן ככל שיצטבר מידע נוסף ו/או כתוצאה ממכלול של גורמים הקשורים בפרוייקטים של חיפושים והפקה של נפט ,לרבות כתוצאה מהמשך ההפקה מהמאגר וכתוצאה מתנאים תפעוליים ו/או תנאי שוק ו/או תנאים רגולטוריים. גבעות עולם חיפושי נפט - שותפות מוגבלת )(1993 שותף כללי: גבעות עולם נפט בע"מ ת.ח45121 . רח' שלמה הלוי 5 הר חוצבים ,ירושלים 91451 בס"ד – GIVOT OLAM OIL EXPLORATION )LIMITED PARTNERSHIP (1993 General Partner: GIVOT OLAM OIL LTD. Post Office Box 45121 5 Shlomo Halevy Har Hotzvim, Jerusalem 91451 פקסFax: +972-2-535-3630 : טלפוןTelephone: +972-2-535-6315 : E-mail: [email protected] השותפות מצהירה כי כל הנתונים דלעיל נערכו באופן התואם למערכת לניהול משאבי פטרוליום ).(SPE-PRMS חוות הדעת של המעריך מצ"ב כנספח א' דו"ח שהתקבל מחברת RDSוכן מכתב מלווה. הצהרת הנהלת התאגיד המדווח תאריך ההצהרה 22.8.2011 ציון שם התאגיד המדווח :גבעות עולם חיפושי נפט שותפות מוגבלת )(1993 שם הנושא בתפקיד להערכת המשאבים :טוביה לוסקין הרינו לאשר ,כי נמסרו למעריך כל הנתונים הרלוונטיים הנדרשים לצורך ביצוע עבודתו; הרינו לאשר ,כי לא בא לידיעתנו כל מידע המצביע על קיום תלות בין המעריך או המבקר לבין השותפות; הרינו לאשר ,כי הכנת הערכת המשאבים והגילוי הכלול בה הינם באחריותנו; הרינו לאשר ,כי למיטב ידיעתנו המשאבים שהוערכו ע"י מעריך המשאבים הינם האומדנים הרלוונטיים ,הטובים והעדכניים ביותר הקיימים ברשותנו. __________________ טוביה לוסקין 1 נתוני תזרים מהוון התחשיבים המופיעים בסעיף זה מצ"ב ,לאחר דו"ח הרזרבות ,בדו"ח נפרד של חברת Greensand Associates Ltdהדו"ח הוכן על ידי מר ניק רייט אשר נתן גם את חוות הדעת בעניין סיכויי ההצלחה של קידוח מגד 5שנכללה בתשקיף המדף של השותפות מיום ,19.5.09את הדו"ח הכלכלי שפרסמה השותפות ביום 29.11.2010ואת נתוני התרים המהוון שצורפו לדו"ח התקופתי לשנת .2010 תחשיבי המס הכלולים בדו"ח וההיטל על פי חוק מיסוי רווחי נפט התשע"א – 2011חושבו על ידי יועץ מקצועי חיצוני מישראל שהכין עבור השותפות תוכנה לחישוב ההיטל האמור .יודגש כי תחשיבי המס הכלולים בדו"ח זה נעשו לגבי חברות המחזיקות ביחידות ההשתתפות של השותפות. על יחידים המחזיקים ביחידות ההשתתפות יחולו שיעורי מס שונים בהתאם לגובה הכנסתם השנתית ולנתונים המיוחדים לכל יחיד. אזהרה – יובהר כי נתוני תזרים מהוונים ,בין אם חושבו בשיעור היוון מסוים או ללא שיעור היוון מייצגים ערך נוכחי ) (NPVאך לאו דווקא מייצגים שווי הוגן. בטבלאות להלן מובאים ההוצאות וההכנסות הצפויות ותשלומי המס בכל שנת הפקה ולכל קטגורית רזרבות בנפרד )לפירוט ההנחות שבבסיס התחשיבים ראו בדו"ח שבנספח ב' להלן(-: 2 כמות מכירות )(MMBBL ) 100%מנכס הנפט( 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 0.26 0.51 0.40 0.31 0.25 0.19 0.15 0.12 0.09 0.07 0.06 0.05 0.04 0.03 0.02 0.02 0.01 0.01 0.01 0.01 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Total 2.61 סה"כ תזרים מהוון מרזרבות מוכחות ) (Proved Reservesליום ) 30.6.2011באלפי דולר ביחס לחלקה של השותפות( סה"כ סה"כ תזרים מהוון לאחר מס תזרים עלויות היטל לפני מס עלויות עלויות תמלוגים היטל נטישה הכנסות ומס מהוון ב- מהוון ב- מהוון ב- מהוון ב- הכנסה פיתוח הפעלה שישולמו ושיקום הכנסה 15% 10% 5% 0% )מהוון ב- (0% 4.34 4.39 4.44 4.50 2.35 0.00 6.85 0.00 8.42 1.71 8.32 25.29 18.21 19.04 19.95 20.94 6.98 0.00 27.93 0.00 3.47 2.55 16.64 50.59 14.75 16.12 17.69 19.50 5.21 0.00 24.71 0.00 0.00 1.94 13.07 39.71 10.19 11.64 13.39 15.50 3.84 0.00 19.34 0.00 0.00 1.58 10.26 31.17 7.04 8.41 10.13 12.31 2.82 0.00 15.13 0.00 0.00 1.29 8.05 24.47 4.80 6.00 7.57 9.66 2.16 0.00 11.82 0.00 0.00 1.07 6.32 19.21 3.34 4.36 5.76 7.72 1.50 0.00 9.22 0.00 0.00 0.90 4.96 15.08 2.24 3.05 4.23 5.95 1.23 0.00 7.18 0.00 0.00 0.76 3.89 11.84 1.50 2.14 3.10 4.58 1.00 0.00 5.58 0.00 0.00 0.65 3.06 9.29 1.01 1.50 2.29 3.55 0.78 0.00 4.33 0.00 0.00 0.57 2.40 7.29 0.68 1.06 1.68 2.74 0.60 0.00 3.34 0.00 0.00 0.50 1.88 5.73 0.45 0.74 1.23 2.10 0.46 0.00 2.57 0.00 0.00 0.45 1.48 4.50 0.30 0.51 0.89 1.61 0.35 0.00 1.96 0.00 0.00 0.41 1.16 3.53 0.20 0.35 0.64 1.21 0.27 0.00 1.48 0.00 0.00 0.38 0.91 2.77 0.13 0.24 0.46 0.91 0.20 0.00 1.11 0.00 0.00 0.35 0.72 2.17 0.08 0.16 0.32 0.67 0.15 0.00 0.81 0.00 0.00 0.33 0.56 1.71 0.05 0.10 0.22 0.48 0.10 0.00 0.58 0.00 0.00 0.32 0.44 1.34 0.03 0.06 0.14 0.33 0.07 0.00 0.40 0.00 0.00 0.31 0.35 1.05 0.02 0.04 0.09 0.21 0.05 0.00 0.26 0.00 0.00 0.30 0.27 0.83 0.02 0.05 0.13 0.33 0.07 0.00 0.41 0.00 0.00 0.03 0.21 0.65 -0.25 -0.62 -1.56 -4.14 0.00 0.00 -4.14 3.96 0.00 0.18 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 258.23 84.96 16.59 11.88 140.84 3.96 . 0.00 30.20 110.65 92.78 79.35 69.12 מהוון ב- 20% 4.30 17.45 13.54 8.97 5.94 3.88 2.58 1.66 1.06 0.69 0.44 0.28 0.18 0.11 0.07 0.04 0.03 0.01 0.01 0.01 -0.11 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 61.16 3 כמות מכירות )(MMBBL )100% מנכס הנפט( 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 0.00 0.26 0.79 0.97 0.81 0.68 0.57 0.47 0.40 0.33 0.28 0.23 0.19 0.16 0.13 0.11 0.09 0.08 0.06 0.05 0.04 0.02 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Total 6.69 סה"כ תזרים מהוון מרזרבות צפויות ) (Probable Reservesליום ) 30.6.2011באלפי דולר ביחס לחלקה של השותפות( סה"כ סה"כ תזרים מהוון לאחר מס תזרים עלויות לפני מס עלויות תמלוגים היטל היטל עלויות נטישה הכנסות מהוון ב- מהוון ב- מהוון ב- מהוון ב- הכנסה פיתוח הפעלה שישולמו ומס ושיקום 15% 10% 5% 0% הכנסה )מהוון ב- (0% -1.43 -1.45 -1.46 -1.48 -0.07 0.00 -1.55 0.00 1.49 0.07 0.00 0.00 -12.40 -12.97 -13.59 -14.27 -2.69 0.00 -16.96 0.00 31.19 2.75 8.32 25.29 25.73 28.12 30.86 34.03 9.26 0.00 43.29 0.00 4.95 4.04 25.63 77.91 31.11 35.55 40.87 47.32 12.26 0.00 59.58 0.00 0.00 4.56 31.45 95.58 22.93 27.40 33.00 40.11 9.73 0.00 49.84 0.00 0.00 3.90 26.35 80.10 16.68 20.83 26.29 33.55 8.09 0.00 41.65 0.00 0.00 3.35 22.06 67.06 12.41 16.20 21.41 28.69 6.05 0.00 34.75 0.00 0.00 2.89 18.46 56.10 8.19 11.18 15.49 21.79 4.64 2.52 28.96 0.00 0.00 2.50 15.42 46.88 4.49 6.40 9.29 13.72 3.01 7.36 24.10 0.00 0.00 2.18 12.88 39.15 2.94 4.39 6.67 10.35 2.27 7.39 20.02 0.00 0.00 1.90 10.75 32.67 1.93 3.02 4.80 7.82 1.72 7.07 16.61 0.00 0.00 1.67 8.96 27.25 1.28 2.09 3.49 5.96 1.31 6.48 13.76 0.00 0.00 1.48 7.47 22.71 0.86 1.46 2.55 4.59 1.01 5.78 11.37 0.00 0.00 1.32 6.22 18.91 0.58 1.03 1.89 3.56 0.78 5.04 9.38 0.00 0.00 1.19 5.18 15.74 0.39 0.73 1.41 2.79 0.61 4.32 7.71 0.00 0.00 1.08 4.31 13.10 0.27 0.54 1.08 2.24 0.49 3.60 6.33 0.00 0.00 0.98 3.58 10.89 0.20 0.40 0.85 1.86 0.41 2.91 5.17 0.00 0.00 0.90 2.98 9.06 0.14 0.30 0.67 1.54 0.34 2.33 4.21 0.00 0.00 0.84 2.48 7.52 0.10 0.23 0.53 1.27 0.28 1.86 3.41 0.00 0.00 0.79 2.06 6.25 0.06 0.14 0.33 0.83 0.18 1.47 2.48 0.00 0.00 1.00 1.71 5.19 0.29 0.72 1.81 4.82 0.15 0.86 5.82 -3.96 0.00 0.49 1.15 3.51 -0.26 -0.66 -1.76 -4.90 0.00 -4.45 -9.35 9.90 0.00 0.52 0.52 1.59 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 662.47 217.95 40.40 37.62 5.94 360.56 . 54.54 59.83 246.18 186.48 145.65 116.50 מהוון ב- 20% -1.42 -11.89 23.63 27.38 19.34 13.48 9.61 6.08 3.19 2.01 1.26 0.80 0.51 0.33 0.22 0.15 0.10 0.07 0.05 0.03 0.13 -0.11 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 94.96 4 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 Total סה"כ תזרים מהוון מרזרבות אפשריות ) (Possible Reservesליום ) 30.6.2011באלפי דולר ביחס לחלקה של השותפות( סה"כ סה"כ תזרים מהוון לאחר מס כמות תזרים לפני מכירות עלויות מס עלויות עלויות תמלוגים היטל ומס היטל הכנסות נטישה מהוון ב -מהוון ב -מהוון ב- מהוון ( MMBBL ) הכנסה פיתוח הפעלה שישולמו הכנסה ושיקום 15% 10% 5% ב0% - 100% ) )מהוון ב- מנכס הנפט( (0% 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 3.28 3.59 3.94 4.34 1.22 0.00 5.57 0.00 0.00 0.37 2.91 8.85 0.09 8.17 9.33 10.73 12.42 3.30 0.00 15.73 0.00 0.00 1.06 8.23 25.01 0.25 12.74 15.22 18.33 22.28 5.57 0.00 27.86 0.00 0.00 1.87 14.58 44.30 0.45 11.75 14.68 18.52 23.64 5.91 4.70 34.25 0.00 0.00 2.30 17.92 54.46 0.55 3.91 5.10 6.75 9.04 1.98 24.66 35.69 0.00 0.00 2.40 18.67 56.76 0.57 1.37 1.88 2.60 3.66 0.80 30.21 34.67 0.00 0.00 2.33 18.14 55.14 0.56 2.42 3.45 5.00 7.39 1.62 24.24 33.26 0.00 0.00 2.23 17.40 52.89 0.53 2.54 3.79 5.76 8.93 1.96 20.69 31.58 0.00 0.00 2.12 16.52 50.22 0.51 2.40 3.75 5.97 9.72 2.13 17.89 29.74 0.00 0.00 2.00 15.56 47.29 0.48 2.14 3.49 5.82 9.95 2.18 15.68 27.81 0.00 0.00 1.87 14.55 44.24 0.45 1.83 3.12 5.46 9.80 2.15 13.91 25.87 0.00 0.00 1.74 13.53 41.14 0.42 1.53 2.73 5.00 9.43 2.07 12.44 23.94 0.00 0.00 1.61 12.53 38.07 0.38 1.26 2.34 4.50 8.90 1.95 11.20 22.06 0.00 0.00 1.48 11.54 35.09 0.35 1.02 1.98 3.98 8.27 1.82 10.17 20.26 0.00 0.00 1.36 10.60 32.22 0.33 0.81 1.65 3.47 7.58 1.66 9.31 18.55 0.00 0.00 1.25 9.70 29.50 0.30 0.64 1.37 3.02 6.92 1.52 8.50 16.93 0.00 0.00 1.14 8.86 26.93 0.27 0.51 1.13 2.62 6.30 1.38 7.74 15.42 0.00 0.00 1.04 8.07 24.52 0.25 0.40 0.94 2.27 5.72 1.26 7.03 14.01 0.00 0.00 0.94 7.33 22.28 0.23 0.22 0.54 1.37 3.63 0.80 4.46 8.88 0.00 0.00 0.60 4.65 14.13 0.14 0.11 0.28 0.76 2.11 0.00 2.12 4.23 0.00 0.00 0.28 2.21 6.72 0.07 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 7.17 709.76 233.51 29.97 0.00 446.28 0.00 . 224.94 41.30 180.04 115.84 80.36 59.06 מהוון ב- 20% 0.00 0.00 3.02 7.19 10.75 9.50 3.03 1.02 1.72 1.73 1.57 1.34 1.10 0.88 0.69 0.54 0.41 0.31 0.24 0.18 0.09 0.05 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 45.35 5 להלן ניתוח רגישות לפרמטרים העיקריים המרכיבים את התזרים המהוון )מחיר הגז וקצב מכירות הגז( ליום 30.6.2011 רגישות /קטגוריה סה"כ שווי נוכחי בהוון של 10% גידול במחיר הנפט בשיעור של 10% רגישות /קטגוריה סה"כ שווי נוכחי בהוון של 10% הפחתה במחיר הנפט בשיעור של 10% רזרבות מוכחות P1 )(Proved Reserves 124 89 רזרבות מוכחות P1 )(Proved Reserves 97 70 רזרבות צפויות 257 155 רזרבות צפויות 234 134 סה"כ רזרבות מסוג P2 )(Proved + Probable 381 244 סה"כ רזרבות מסוג P2 )(Proved + Probable 331 204 רזרבות אפשריות 200 87 רזרבות אפשריות 163 76 סה"כ רזרבות מסוג P3 ) Proved+Probable+Possible (Reserves 581 331 סה"כ רזרבות מסוג P3 ) Proved+Probable+Possible (Reserves 495 280 הפחתה במחיר הנפט בשיעור של 15% גידול במחיר הנפט בשיעור של 15% רזרבות מוכחות P1 )(Proved Reserves 131 94 רזרבות מוכחות P1 )(Proved Reserves 90 65 רזרבות צפויות 261 160 רזרבות צפויות 226 127 סה"כ רזרבות מסוג P2 )(Proved + Probable 393 253 סה"כ רזרבות מסוג P2 )(Proved + Probable 316 192 רזרבות אפשריות 211 91 רזרבות אפשריות 157 74 סה"כ רזרבות מסוג P3 ) Proved+Probable+Possible (Reserves 603 344 סה"כ רזרבות מסוג P3 ) Proved+Probable+Possible (Reserves 473 266 הפחתה במחיר הנפט בשיעור של 20% גידול במחיר הנפט בשיעור של 20% רזרבות מוכחות P1 )(Proved Reserves 138 99 רזרבות מוכחות P1 )(Proved Reserves 83 60 רזרבות צפויות 267 164 רזרבות צפויות 215 119 סה"כ רזרבות מסוג P2 )(Proved + Probable 405 263 סה"כ רזרבות מסוג P2 )(Proved + Probable 298 179 רזרבות אפשריות 221 95 רזרבות אפשריות 153 74 סה"כ רזרבות מסוג P3 ) Proved+Probable+Possible (Reserves 625 357 סה"כ רזרבות מסוג P3 ) Proved+Probable+Possible (Reserves 452 253 . 6 רגישות /קטגוריה סה"כ שווי נוכחי בהוון של 10% רגישות /קטגוריה גידול בקצב מכירות הנפט בשיעור של 10% סה"כ שווי נוכחי בהוון של 10% הפחתה בקצב מכירות הנפט בשיעור של 10% רזרבות מוכחות P1 )(Proved Reserves 110 84 רזרבות מוכחות P1 )(Proved Reserves 98 70 רזרבות צפויות 245 153 רזרבות צפויות 236 135 סה"כ רזרבות מסוג P2 )(Proved + Probable 354 237 סה"כ רזרבות מסוג P2 )(Proved + Probable 333 205 רזרבות אפשריות 180 84 רזרבות אפשריות 164 76 סה"כ רזרבות מסוג P3 ) Proved+Probable+Possible (Reserves 535 322 סה"כ רזרבות מסוג P3 ) Proved+Probable+Possible (Reserves 497 281 הפחתה בקצב מכירות הנפט בשיעור של 15% גידול בקצב מכירות הנפט בשיעור של 15% רזרבות מוכחות P1 )(Proved Reserves 109 86 רזרבות מוכחות P1 )(Proved Reserves 91 66 רזרבות צפויות 244 156 רזרבות צפויות 228 129 סה"כ רזרבות מסוג P2 )(Proved + Probable 354 242 סה"כ רזרבות מסוג P2 )(Proved + Probable 319 194 רזרבות אפשריות 180 86 רזרבות אפשריות 159 75 סה"כ רזרבות מסוג P3 ) Proved+Probable+Possible (Reserves 534 329 סה"כ רזרבות מסוג P3 ) Proved+Probable+Possible (Reserves 478 269 הפחתה בקצב מכירות הנפט בשיעור של 20% גידול בקצב מכירות הנפט בשיעור של 20% רזרבות מוכחות P1 )(Proved Reserves 109 88 רזרבות מוכחות P1 )(Proved Reserves 85 61 רזרבות צפויות 244 159 רזרבות צפויות 218 121 סה"כ רזרבות מסוג P2 )(Proved + Probable 353 247 סה"כ רזרבות מסוג P2 )(Proved + Probable 303 182 רזרבות אפשריות 180 89 רזרבות אפשריות 154 74 סה"כ רזרבות מסוג P3 ) Proved+Probable+Possible (Reserves 534 335 סה"כ רזרבות מסוג P3 ) Proved+Probable+Possible (Reserves 457 256 . גבעות עולם חיפושי נפט - שותפות מוגבלת )(1993 שותף כללי: גבעות עולם נפט בע"מ ת.ח45121 . רח' שלמה הלוי 5 הר חוצבים ,ירושלים 91451 – GIVOT OLAM OIL EXPLORATION )LIMITED PARTNERSHIP (1993 General Partner: GIVOT OLAM OIL LTD. Post Office Box 45121 5 Shlomo Halevy Har Hotzvim, Jerusalem 91451 בס"ד פקסFax: +972-2-535-3630 : טלפוןTelephone: +972-2-535-6315 : E-mail: [email protected] הצהרת הנהלת התאגיד המדווח תאריך ההצהרה 22.8.2011 ציון שם התאגיד המדווח :גבעות עולם חיפושי נפט שותפות מוגבלת )(1993 שם הנושא בתפקיד להערכת המשאבים :טוביה לוסקין הרינו לאשר ,כי נמסרו למחשבי התזרים המהוון כל הנתונים הרלוונטיים הנדרשים לצורך ביצוע עבודתם; הרינו לאשר ,כי לא בא לידיעתנו כל מידע המצביע על קיום תלות בין המעריך או המבקר לבין השותפות; הרינו לאשר ,כי הכנת התזרים המהוון והגילוי הכלול בה הינם באחריותנו; הרינו לאשר ,כי למיטב ידיעתנו התזרים המהוון הינו התחשיב ,הטוב והעדכני ביותר הקים ברשותנו. __________________ טוביה לוסקין בכבוד רב, גבעות עולם נפט בע"מ השותף הכללי באמצעות טוביה לוסקין ,דירקטור . advancing reservoir performance GIVT0002 th 28 July, 2011 Tovia Luskin Givot Olam Oil Exploration Ltd 5 Shlomo Halevy Har Hotzvim Jerusalem 91451 Israel To whom it may concern, Tovia Luskin, CEO of Givot Olam Oil Ltd requested a classification of the oil and gas resources of the Meged th Field on 6 July, 2011. This was performed by Colin Cranfield and Antony Harris of Baker RDS Ltd, whose contact details can be found at the foot of this letter. Antony is a Chartered Petroleum Engineer with the Energy Institute. Both Colin and Antony are members of the Society of Petroleum Engineers (SPE) and also meet the required qualifications of the SPE to be designated a “Reserves Auditor”. Yours sincerely For and on behalf of Baker RDS Limited Colin Cranfield Colin Cranfield M.Sc DIC Principal Reservoir Engineer Antony Harris Antony Harris CEng MEI Senior Petroleum Engineer Baker RDS Limited – Registered in Scotland, No. SC224905 Registered Office: Peregrine Road, Westhill Business Park, Aberdeen, AB32 6JL, UK Tel: +44 (0) 1224 741400, Fax: +44 (0) 1224 741855, www.baker-rds.com A Baker RDS Project for Givot Olam Oil Exploration Limited Partnership Meged Field Reserves Classification, 28th July 2011 GIVT0002 Revision No. 3 28th July, 2011 Givot Olam Oil Exploration Ltd Meged Field Reserves Classification RDS GIVT0002 Final Report Document Approval & Distribution For RDS Prepared by Signature Date Colin Cranfield – Principal Reservoir Engineer Colin Cranfield 28 July 2011 Antony Harris – Senior Petroleum Engineer Antony Harris 28 July 2011 Sharon McCollough 28 July 2011 Carla Riddell 28 July 2011 th th Reviewed by Sharon McCollough - Reservoir Team Leader th Approved for Issue Carla Riddell – Aberdeen Operations Manager th Report Distribution Number of Copies Client Name & Address 2 Tovia Luskin Givot Olam Oil Exploration Limited PO Box 45121 5 Shlomo Halevy Har Hotzvim Jerusalem 91451 Israel 28th July, 2011 iii Givot Olam Oil Exploration Ltd Meged Field Reserves Classification RDS GIVT0002 Final Report Executive Summary Following a request from the Israeli Securities Authority, Givot Olam requires classification of the Meged oil resources under PRMS guidelines. They approached Baker RDS to perform this classification. This project details the classification of the Meged oil resources, which was based on supplied information including production rates and down-hole pressure data from well Meged-5 obtained during January to June 2011 only. This current classification of Meged oil resources updates a previous classification dated 31 st December 2010 (Reference 1). A large proportion of the information used in the reserves classification was taken from three supplied reports and a provisional business plan, economic analysis and a probabilistic determination of volumes within the Core Area. The supplied data was not audited but reviewed and found to be technically sound and a reasonable basis for providing the information required to perform the reserves classification. The information and data related to pressure test operations on Meged-5 Zone 8b during the period January to June 2011 were checked and quality controlled prior to use in pressure test analysis. The supplied data and Meged-5 Zone 8b pressure test analysis were sufficient for the classification of reserves. No further data or analysis was required. The information given in this report is entirely independent and Baker RDS certify that all personnel involved in this project meet or exceed the required qualifications set out in the PRMS for Reserves Auditors. We have determined that the field has Reserves and Contingent Resources as shown in Table 1 below. Resource Category Oil Quantity Gas Quantity 1P 2.6 MMSTB - 2P 10.5 MMSTB - 3P 16.9 MMSTB - 1C 31.9 MMSTB 61.8 Bscf 2C 59.9 MMSTB 119.7 Bscf 3C 90.1 MMSTB 182.1 Bscf Table 1 - Meged Field Resource Classification In order to potentially increase the resources within the above categories, further drilling and testing is required. The contingent resources (1C/2C/3C) are contingent on drilling, fracturing and gas-lifting 13 production wells in the Core Area in addition to Meged-5, -6 and -7 with a further 27 in the Non-Core Area. 28th July, 2011 v Givot Olam Oil Exploration Ltd Meged Field Reserves Classification RDS GIVT0002 Final Report In order to move some of the gas resources into reserves, an agreement to sell the gas, in the form of generated electricity or otherwise, is required. Additionally an indication of any fuel gas requirements and any difference between produced gas and sales gas volumes would also need to be supplied. Baker RDS can provide assistance in development planning, reservoir management and monitoring and other relevant technical aspects for the future of the Meged Field if required. 28th July, 2011 vi Givot Olam Oil Exploration Ltd Meged Field Reserves Classification RDS GIVT0002 Final Report Contents Document Approval & Distribution ............................................................................................. iii Executive Summary .................................................................................................................... v Contents .................................................................................................................................... 7 List of Tables ............................................................................................................................. 8 List of Figures ............................................................................................................................ 9 1.0 Introduction ................................................................................................................... 11 Reserves Information .................................................................................................... 11 1.1. Supplied Data ............................................................................................................ 11 1.2. Summary of Qualifications ........................................................................................ 12 1.3. About Baker RDS ...................................................................................................... 12 1.4. Statement of Independence ...................................................................................... 13 1.5. Permission to Publish ................................................................................................ 13 2.0 Petroleum Resource Management System .................................................................. 14 3.0 Meged Oil Field Resources .......................................................................................... 15 3.1. Meged Oil Reserves .................................................................................................. 16 3.1.1. Meged 1P Oil Reserves ..................................................................................... 16 3.1.2. Meged 2P & 3P Oil Reserves ............................................................................ 17 Core Area...................................................................................................................... 17 3.2. Meged Contingent Oil Resources ............................................................................. 19 3.2.1. 3.3. Full Field Monte Carlo Simulation ...................................................................... 19 Meged Contingent Gas Resources ........................................................................... 20 4.0 Potential For Increased Reserves ................................................................................ 22 5.0 Conclusions & Recommendations ................................................................................ 23 6.0 References.................................................................................................................... 24 28th July, 2011 7 Givot Olam Oil Exploration Ltd Meged Field Reserves Classification RDS GIVT0002 Final Report List of Tables Table 1 - Meged Field Resource Classification .......................................................................... v Table 2 - Meged Field Contingent Resources ......................................................................... 20 Table 3 - Meged Field Contingent Gas Resources ................................................................. 21 Table 4 - Meged Field Resource Classification ....................................................................... 23 28th July, 2011 8 Givot Olam Oil Exploration Ltd Meged Field Reserves Classification RDS GIVT0002 Final Report List of Figures Figure 1 - Meged Field Map .................................................................................................... 15 Figure 2 – Meged-5 Zone 8b Pressure Test Analysis Match to Measured Data .................... 18 Figure 3 – Meged Field Oil Reserves Distribution ................................................................... 18 Figure 4 - Meged Full Field Contingent Oil Resource Distribution .......................................... 20 28th July, 2011 9 Givot Olam Oil Exploration Ltd Meged Field Reserves Classification RDS GIVT0002 Final Report 1.0 Introduction Givot Olam Oil Exploration Limited Partnership (Givot Olam) is the owner and operator of the Meged Oil Field in Israel. They previously completed and tested the Meged-5 well and received a number of documents from Fracture Technologies Ltd and Greensand Associates updating the technical view of the field following the drilling of Meged-5 (see Section 1.1). Further Meged-5 testing operations were performed between 23 rd January and 13 th June 2011, after which the Meged-5 well was placed on an extended production test which is still in progress. Following a request from the Israeli Securities Authority, Givot Olam requires classification of the Meged oil resources under PRMS guidelines (Reference 2). Baker RDS have received copies of a number of documents and files containing pertinent information and data on the Meged Field and have classified the Meged resources according to the PRMS based on information found within the supplied documents and files. In 2007, the Society of Petroleum Engineers (SPE) published the “Standards Pertaining to the Estimating and Auditing of Oil and Gas Reserves Information” (Reference 3). For the purposes of this project, the following definition is applicable. Reserves Information “Reserves Information consists of various estimates pertaining to the extent and value of petroleum properties. Reserves Information will include (i) estimates of petroleum reserves and may, but will not necessarily, include estimates of (ii) the future production rates from such reserves, (iii) the future net revenue from such reserves, and (iv) the present value of such future net revenue. All such Reserves Information should be estimated and classified as appropriate to stated reserves definitions.” This report consists of Reserves Information as described by the above. This project has classified resources based on the supplied information and files only. We have not performed any additional technical work or any further development planning as part of this project, with the exception of the probabilistic resource calculations for the “Non-Core Area” and the analysis of the Meged-5 Zone 8b rate-pressure data, using the supplied data as input. 1.1. Supplied Data This project was based on information taken from three key documents and files providing Meged-5 Zone 8b rate and down-hole pressure data. The bulk of the background information and technical data is taken from “Completion & Production Testing Meged-5” report (Reference 4). The report shows that Fracture Technologies have used industry standard techniques in their analysis (for example pressure transient analysis and reservoir simulation), which are both techniques that we would have used had we performed the technical work ourselves. Consequently, we believe that the 28th July, 2011 11 Givot Olam Oil Exploration Ltd Meged Field Reserves Classification RDS GIVT0002 Final Report report is technically sound and detailed enough to provide the information we need to perform the resource classification. We have also received the Provisional Business Plan & Economic Analysis by Greensand Associates (Reference 5), which contains provisional economic models that show the field development to be economically viable. The probabilistic determination of resources for the Meged Core Area, also from Greensand Associates (Reference 6), provides useful information regarding probabilistic input for the classification of the Meged resources as detailed in this report. Both the Greensand Associates documents use industry standard techniques (for example net present value calculations and Monte Carlo probabilistic analysis) and we therefore consider the reports to be of good quality and technically reliable. The Meged-5 Zone 8b rate and down-hole pressure data supplied enabled a detailed pressure test analysis using standard industry techniques (Reference 7). 1.2. Summary of Qualifications The aforementioned standards prescribe the required professional qualifications for a Reserves Auditor as follows: “A Reserves Auditor shall be considered professionally qualified in such capacity if he or she has sufficient educational background, professional training (similar to that described above), and professional experience to enable him or her to exercise prudent professional judgment while acting in responsible charge for the conduct of an audit of Reserves Information estimated by others. The determination of whether a Reserves Auditor is professionally qualified should be made on an individualby-individual basis and with the recognition and respect of his or her peers. A Reserves Auditor would normally be considered to be qualified if he or she (i) has a minimum of 10 years’ practical experience in petroleum engineering or petroleum production geology, with at least 5 years of such experience being in responsible charge of the estimation and evaluation of Reserves Information; and (ii) either (A) has obtained, from a college or university of recognized stature, a bachelor’s or advanced degree in petroleum engineering, geology, or other discipline of engineering or physical science or (B) has received, and is maintaining in good standing, a registered or certified professional engineer’s license or a registered or certified professional geologist’s license, or the equivalent thereof, from an appropriate governmental authority or professional organization.” Baker RDS certify that all personnel involved in this project meet or exceed the above qualifications. 1.3. About Baker RDS Baker RDS Limited is part of the Reservoir Development Services group (RDS) within Baker Hughes. Where the services for which RDS has been engaged involve the provision of impartial advice, these services are undertaken in a manner such that other Baker Hughes 28th July, 2011 12 Givot Olam Oil Exploration Ltd Meged Field Reserves Classification RDS GIVT0002 Final Report corporate relationships that may exist with the same client do not influence the independence or impartiality of the advice being given 1.4. Statement of Independence The opinion given within this report is entirely independent. Neither Baker RDS, nor any of the personnel involved in this project have any direct link with, or financial interest in, Givot Olam Oil Exploration Limited Partnership. 1.5. Permission to Publish Baker RDS gives Givot Olam permission to publish this document in its entirety on the clear understanding that it represents a subjective view of the Meged Field based on data made available by Givot Olam. However, if Givot Olam wish to publish parts of this report, then they must request specific permission from Baker RDS. 28th July, 2011 13 Givot Olam Oil Exploration Ltd Meged Field Reserves Classification RDS GIVT0002 Final Report 2.0 Petroleum Resource Management System In 2007, a new document was issued in order to try to establish consistent definitions for different classes of recoverable hydrocarbons. The Petroleum Resources Management System document (PRMS) (Reference 2) is sponsored by the Society of Petroleum Engineers (SPE), the American Association of Petroleum Geologists (AAPG), the World Petroleum Council (WPC) and the Society of Petroleum Evaluation Engineers (SPEE). Discovered recoverable volumes, such as those found in Meged, may be considered as commercially producible, and therefore reserves if Givot Olam demonstrate firm intention to proceed with development. This intention must be based on all of the following: Evidence to support a reasonable timetable for development. A reasonable assessment of the future economics of such development projects meeting defined investment and operating criteria: A reasonable expectation that there will be a market for all or at least the expected sales quantities of production required to justify development. Evidence that the necessary production and transportation facilities are available or can be made available Evidence that legal, contractual, environmental and other social and economic concerns will allow for the actual implementation of the recovery project being evaluated. Evidence of intended transportation facilities (Reference 8) and a work schedule approved by the Israeli petroleum commissioner at the Ministry of Energy (Reference 9) has been provided to RDS. This work schedule meets the PRMS requirements of a “reasonable timetable for development” and, combined with the provisional economic analysis performed by Greensand Associates provides sufficient evidence for some of the Meged resources to be considered as “Reserves”. Reserves are sub-divided into three categories 1P, 2P and 3P, which denote the low, best and high estimate scenarios. Similarly, Contingent Resources are sub-divided into 1C, 2C and 3C categories. The following section will explain how and why RDS have classified the Meged resources into these categories. 28th July, 2011 14 Givot Olam Oil Exploration Ltd Meged Field Reserves Classification RDS GIVT0002 Final Report 3.0 Meged Oil Field Resources This project has taken the supplied data and classified resources according to the PRMS for the entire Meged Field. A map of the field is provided as Figure 1 below. Meged-4 Meged-3 Meged-2 NonCore Area Core Area Meged-5 Green Circles show possible future well locations N Scale: 1 square = 1 km2 Figure 1 - Meged Field Map The bulk of the information provided is related to the recent drilling and testing of Meged-5, although key information regarding the previous Meged wells is also included in the documentation. Givot Olam named the crestal area, including Meged-5, as the Core Area. We have therefore named the rest of the field the Non-Core Area as shown in Figure 1. This 2 area covers an area of approximately 86 km over the rest of the field, away from the oil-water contact on the map where potential future wells may be located. It should be noted that the OWC has not been fully defined and is currently determined by “oil-down-to” values. 28th July, 2011 15 Givot Olam Oil Exploration Ltd Meged Field Reserves Classification RDS GIVT0002 Final Report 3.1. Meged Oil Reserves 3.1.1. Meged 1P Oil Reserves In order for reserves to be classified as 1P, production needs to be proven and recoverable via an approved work schedule. Oil production is proven from Meged-5; the well was placed th on an extended production test on 15 June 2011 and oil production rate has remained fairly stable since then. The produced oil is exported and sold to a nearby refinery. Analysis of the Meged-5 rate and pressure data over the period January – June 2011 provided an estimate for the minimum Zone 8b oil volume in connection with the well of 8.65 MMSTB. This is based on a high quality match to the entire rate-pressure history including a pressure build-up of over 100 days, as illustrated in Figure 2. Hence there is a high degree of confidence in this estimate of the Zone 8b connected oil volume. For Meged-5 underlying Zones 1-7, a proved (i.e. tested) oil in place is reported for Meged-5 2 of 10.0 MMSTB/km (Reference 6). The Fracture Technologies report (Reference 4) uses a 2 drainage area for Meged-5 of 4.4 km for the bulk of the modelling; therefore we have selected this as the proved drainage area for Zones 1-7 in the well. Recovery factors from naturally fractured reservoirs vary considerably based on factors such as reservoir quality and heterogeneity, relative storage capacity in the matrix and fracture systems, relative degree to which the matrix and fracture systems provide fluid-flow pathways and the type of producing mechanism. Recovery factors in depletion drive oil reservoirs such as Meged can range from less than 10% to over 50% but are typically around 15-20% (e.g. References 10 and 11). Although strong aquifer support can lead to early water breakthrough and low recoveries, this would appear to be an unlikely outcome at Meged based on the current geological understanding. There is currently no plan to install artificial lift in Meged wells. The Greensand Associates (Reference 6) Monte Carlo volumes have a recovery factor distribution, which assigns a P90 (low case) recovery factor of 5%. Under the PRMS guidelines for 1P reserves, there should be at least a 90% probability of the 1P quantities being produced. Therefore, in view of this and the foregoing points and current reservoir uncertainties, although 5% is a probabilistic output, we have selected it to represent a low case recovery scenario for the 1P reserves category. The 1P reserves for the Meged Field are therefore estimated using the Volumetric Method (Reference 3) as follows: 8.65 x 0.05 + 10.0 x 4.4 x 0.05 = 2.6 MMSTB. The connected volumes for Meged-2 and Meged-4 cannot be considered as 1P reserves as there is no plan to bring these wells on production. 28th July, 2011 16 Givot Olam Oil Exploration Ltd Meged Field Reserves Classification RDS GIVT0002 Final Report 3.1.2. Meged 2P & 3P Oil Reserves The classification of the Meged Contingent Resources is primarily based on the Monte Carlo modelling performed by Greensand Associates. We have re-run and verified these calculations and it is our results using the Greensand Associates input that are used in the classification of these resources. Core Area The Monte Carlo modelling for the Core Area resources takes the same input as that used by Greensand Associates. 2 The oil in place is modelled using a normal distribution with a mean of 15.0 MMSTB/km and a standard deviation of 2. This results in a P90 oil in place of 10.0, representing the tested oil in place from Meged 5, and a P10 oil in place of 19.0, representing the tested and untested zones in Meged-5. 2 The optimum average drainage area across the whole core area is 3.2 km which, when 2 applied to the Core Area of 50 km , gives 16 production wells, two of which are planned for 2012 in addition to Meged-5, which is already drilled. The actual drainage area per well is 2 2 modelled using a triangular distribution with a mode of 3.0 km , a minimum of 1.5 km and a 2 maximum of 3.2 km . The recovery factor distribution is based on the results of the various simulations performed by Fracture Technologies. This report (Reference 4) suggests recoveries of 2.5% to 4% from clean, unfractured wells, with up to 16% for successfully fractured, gas lifted wells. Accordingly, Greensand Associates applied a triangular distribution with a mode of 11%, a minimum of 0% (representing well failure) and a maximum of 17.5%. The current approved work schedule has three wells on production; Meged-5 is already drilled and Meged-6 and Meged-7 are planned to follow in 2012. A Monte Carlo simulation has therefore been performed using three wells with the assumptions given above. The results of this simulation are shown in Figure 3. 28th July, 2011 17 Givot Olam Oil Exploration Ltd Meged Field Reserves Classification RDS GIVT0002 Final Report Model match to measured pressure data Figure 2 – Meged-5 Zone 8b Pressure Test Analysis Match to Measured Data 100% 90% P90 = 4.5 MMSTB 80% Probability 70% 60% 50% P50 = 10.5 MMSTB 40% 30% 20% 10% P10 = 16.9 MMSTB 0% 0 5 10 15 20 25 30 Oil Reserves (MMSTB) Figure 3 – Meged Field Oil Reserves Distribution To be consistent with the PRMS guidelines, there needs to be a 50% probability that at least the 2P Reserves are recovered. Similarly, there needs to be a 10% chance 3P reserves are recovered. The 2P and 3P reserves for the three wells approved for production in the Meged Field are therefore 10.5 MMSTB and 16.9 MMSTB respectively. 28th July, 2011 18 Givot Olam Oil Exploration Ltd Meged Field Reserves Classification RDS GIVT0002 Final Report The P90 of the above distribution is 4.5 MMSTB. However, this cannot be classified as the 1P reserves figure as it needs to be proved that these resources are connected to wells that have already been drilled and are planned to be brought on production. The 1P reserves figure is therefore 2.2 MMSTB as shown in Section 3.1.1. 3.2. Meged Contingent Oil Resources The classification of the Meged Contingent Oil Resources outside of Meged-5, -6 and -7 is also based on the Monte Carlo modelling performed by Greensand Associates. In addition to the assumptions given above for the Core Area, we have also calculated resources for the Non-Core Area using an adaptation of the Greensand Associates work. 2 2 The Non-Core area covers approximately 87 km which, with a well spacing of 3.2 km , equates to 27 further production wells. The Meged-2 well just falls within the Non Core Area, which is known to be of poorer quality than the Meged 5 well (Reference 12), indicating a possible degradation of reservoir quality to the north. It was assumed that the Meged 2 well represents the best quality reservoir in the non-core area as wells Meged-3 and Meged 4 did not flow. The in place volume considered to 2 be proved by the Meged 2 well, of 8.8 MMSTB/km , was therefore taken to be a maximum oil in place for the whole Non-Core Area. We have fitted a triangular distribution to the Non-Core 2 2 Area oil in place with a maximum of 8.8 MMSTB/km , a minimum of 0 MMSTB/km , representing the chance of no hydrocarbons in the non-drilled areas and a mode of 4.4 2 MMSTB/km , halfway between the minimum and maximum. To represent the poorer quality of the Non-Core Area, we have assigned a distribution for the recovery factor which is half that of the Core Area, i.e. a triangular distribution with a minimum of zero (representing well failure), a mode of 5.5% and a maximum of 9%. We have assigned the drainage area the same distribution as that for the Core Area. 3.2.1. Full Field Monte Carlo Simulation A Monte Carlo simulation for the full field has been performed assuming that 13 wells in addition to Meged-5, -6 and -7 are drilled in the Core Area with a further 27 wells in the Non Core Area. Performing the Monte Carlo modelling of the above distributions gives a distribution of resources for the full Meged Field, as shown in Figure 4. 28th July, 2011 19 Givot Olam Oil Exploration Ltd Meged Field Reserves Classification RDS GIVT0002 Final Report Meged Full Field 100% 90% P90 = 31.9 MMSTB 80% Probability 70% 60% 50% P50 = 59.9 MMSTB 40% 30% 20% 10% P10 = 90.1 MMSTB 0% 0 20 40 60 80 100 120 140 Contingent Oil Resources (MMSTB) Figure 4 - Meged Full Field Contingent Oil Resource Distribution To be consistent with the PRMS guidelines, there needs to be a 90% probability that at least the 1C contingent resources are recovered. Similarly, there needs to be a 50% and 10% that the 2C and 3C resources respectively are recovered. Therefore, the Meged Field contingent resources are allocated as follows: Resource Category Quantity 1C 31.9 MMSTB 2C 59.9 MMSTB 3C 90.1 MMSTB Table 2 - Meged Field Contingent Resources The values in Table 2 are contingent on drilling, fracturing and gas-lifting 13 production wells in the Core Area with a further 27 in the Non-Core Area. 3.3. Meged Contingent Gas Resources In addition to the oil resources, there are also contingent gas resources associated with the oil. As there is no gas sales contract or other commercial agreement to sell the associated gas, we cannot classify the resources as reserves. The Meged Oil has an average gas oil ratio of 1700 scf/stb (Reference 4). This can be applied as a multiplier to the oil resources classified above in order to determine the Meged Field contingent gas resources. 28th July, 2011 20 Givot Olam Oil Exploration Ltd Meged Field Reserves Classification RDS GIVT0002 Final Report The gas resources must be determined for both the Meged-5, -6 and -7 areas plus the areas used for determining the oil contingent resources. We can determine the oil volumes from which to calculate the gas resources from the results of the Monte Carlo modelling detailed above. The 2C gas volume is determined from sum of the 2P oil reserves and the 2C oil resources with the 3C gas volume being determined from the sum of the 3P oil reserves and 3C oil resources. The 1C gas resources are determined from the P90 oil reserves and the 1C oil resources. We do not use the sum of the 1P reserves and 1C resources as, unlike reserves, we do not need to use wells that are planned to be brought online for contingent resources. We can then calculate the contingent gas resources using the gas-oil ratio as shown in Table 3. Resource Category Oil Quantity for Calculation (MMSTB) Gas Resources (Bscf) 1C 4.51 + 31.85 = 36.36 61.8 2C 10.51 + 59.90 = 70.41 119.7 3C 16.95 + 90.15 = 107.10 182.1 Table 3 - Meged Field Contingent Gas Resources In order to move some of the gas resources into reserves, an agreement to sell the gas, in the form of generated electricity or otherwise, is required. Additionally an indication of any fuel gas requirements and any difference between produced gas and sales gas volumes would also need to be supplied. 28th July, 2011 21 Givot Olam Oil Exploration Ltd Meged Field Reserves Classification RDS GIVT0002 Final Report 4.0 Potential For Increased Reserves In order to potentially increase the volumes in reserves categories, then further work is required to delineate the field. This could involve determining the oil-water contact (currently defined using a variety of “oil-down-to” values), determining inter-area communication (e.g. between Meged-2 and Meged-5), performing extended well tests and drilling of further production wells. An approved work schedule or development plan with wells in addition to Meged-5 -6 and -7 will enable the moving of some of the contingent resources into the 2P and 3P categories. Further successful drilling and testing is required to increase the 1P reserves. Baker RDS can provide assistance with any of the above. 28th July, 2011 22 Givot Olam Oil Exploration Ltd Meged Field Reserves Classification RDS GIVT0002 Final Report 5.0 Conclusions & Recommendations Baker RDS have performed a classification of the Meged Field resources under the PRMS system based on a number of supplied reports. We have determined that the field has resources as classified in Table 4 below. Resource Category Oil Quantity Gas Quantity 1P 2.6 MMSTB - 2P 10.5 MMSTB - 3P 16.9 MMSTB - 1C 31.9 MMSTB 61.8 Bscf 2C 59.9 MMSTB 119.7 Bscf 3C 90.1 MMSTB 182.1 Bscf Table 4 - Meged Field Resource Classification The contingent resources (1C/2C/3C) are contingent on drilling, fracturing and gas-lifting 16 production wells in the Core Area with a further 27 in the Non-Core Area. An approved work schedule or development plan with wells in addition to Meged-5, -6 and -7 will enable the moving of some of the contingent resources into the 2P and 3P categories. Proving connectivity between different areas of the field will also help in this regard. Further successful drilling and testing is required to increase the 1P reserves. In order to move some of the gas resources into reserves, an agreement to sell the gas, in the form of generated electricity or otherwise, is required. Additionally an indication of any fuel gas requirements and any difference between produced gas and sales gas volumes would also need to be supplied. 28th July, 2011 23 Givot Olam Oil Exploration Ltd Meged Field Reserves Classification RDS GIVT0002 Final Report 6.0 1. References st Baker RDS Report (GIVT0001), “Meged Field Reserves Classification”, 31 December 2010 2. Society of Petroleum Engineers (SPE), American Association of Petroleum Geologists (AAPG), World Petroleum Council (WPC), Society of Petroleum Evaluation Engineers (SPEE). “Petroleum Resources Management System” (2007) 3. Society of Petroleum Engineers (SPE), “Standards Pertaining to the Estimating and th Auditing of Oil and Gas Reserves Information (revised)”, 19 February, 2007 4. th Fracture Technologies Ltd, “Completion and Production Testing Meged-5 19 May – th 25 July”, September 2010 5. Greensand Associates Ltd, “Meged Field, Israel – Provisional Business Plan & th Economic Analysis”, September 30 , 2010 6. Greensand Associates Ltd, “Probabilistic Determination of Resources – Meged Core th Area”, 30 September, 2010 7. Baker RDS Report (GIVT0002), “Pressure Test Analysis, Meged-5 Zone 8b, January – st June 2011”, 21 July 2011 8. th “Confirmation of transportation and sales agreements”, Email from Tovia Luskin, 8 November 2010 9. Mimran, Dr. Yaakov, Israeli Petroleum Commissioner, “Re: Rosh Ha’Ayin Lease I/11 – th Operations Schedule”, 17 October 2010 (translation) 10. Aguilera, R., “Geologic and Engineering Aspects of Naturally Fractured Reservoirs”, CESG Recorder, Feb. 2003. 11. Allan, J. and Qing Sun, S., “Controls on Recovery Factor in Fractured Reservoirs: Lessons Learned from 100 Fractured Fields”, SPE 84590, Oct. 2003 12. th Greensand Associates Ltd, “Assessment of the Meged-5 Well Proposal”, 20 February 2009 28th July, 2011 24 Meged Field, Israel Economic Analysis N J R Wright Greensand Associates Ltd 22nd August 2011 ga Greensand Associates Ltd 1 Background and Introduction This report was prepared by Greensand Associates Ltd (Greensand) at the request of Mr Tovia Luskin of Givot Olam Oil Exploration Limited Partnership (1993) (Givot), following the completion of a detailed test evaluation and Reservoir Modelling study of the Meged-5 well by an internationally recognised reservoir engineering consultant, and an updated Reserves Classification Report by RDS Ltd (Meged Field Reserves Classification, – RDS GIVT0002 Revision No.3, 28th July 2011) Meged-5, drilled during 2010 near the crest of the Meged structure, was subjected to extensive testing from 4 different zones in the oilbearing Mohilla and Saharonim Formation carbonates, including trial hydraulic fracturing (“frac’ing”), over a 2 month period. The data from these tests, combined with geological information from all available wells and seismic, was used to build a detailed Reservoir Model of the field and to predict the production behaviour of potential future wells under different circumstances – including the successful frac’ing of the main productive zones, and the response of potential wells to artificial lift (probably gas lift). The results of this study were made available to Greensand and to RDS by Givot in the form of a comprehensive technical report. Greensand was previously asked to develop a provisional simplified, field development scheme for the Meged field, and using appropriate production profiles to develop, in consultation with Givot, a series of reasonable production scenarios for the field. A provisional economic model for the development scenarios was then built, using the Givot’s estimates of drilling and completion costs, operating expenses etc. along with estimates of other capital expenditures and Greensand’s understanding of the applicable fiscal terms. It must be stressed that all these cost estimates are of a highly provisional nature and are subject to significant variation in the future as more detailed estimates are obtained; however, in our opinion they represent a reasonable view of what a development of the Meged asset might look like. Following the completion of the Reserves Classification Report by RDS, Greensand was asked to produce a version of the Meged Economic Model which correspond to the 1P, 2P and 3P ‘Reserves’ volumetric cases. Givot Olam also requested that individual well profiles be modelling with a variety of Initial Production rates – 800, 1,400 and 2,000 bopd. The Opinion given here is entirely independent; neither Mr Wright nor Greensand Associates Ltd have any direct link with or financial interest in Givot Olam Oil Exploration Limited Partnership (1993), and no agreement exists between them apart from that covering the generation of this Opinion (‘Provision of Consulting Services to Givot Olam’ – Dated 26th August 2010). Permission is given to publish this Opinion as a report to the Tel Aviv Stock Exchange and to include it in presentations on the clear understanding that it represents a subjective view of the Meged Field based on data made available by Givot. ga Greensand Associates Ltd 2 Economic Modelling Economic values of the provisional development scenarios are evaluated using a simple Spreadsheet analysis. No inflation factors have been applied, either to costs or to sale prices, at this stage. Production Profiles Profiles were derived from the Reservoir Modelling work by the reservoir engineering consultant, and provided by Givot, including some assumptions made for varying the Initial Production rate from the wells. Profiles have been modified and simplified for economic modelling purposes, but Greensand has not verified the reservoir modelling upon which the profiles are based. Full field profiles were built up from individual well profiles scheduled according to the proposed development scheme. The input data was only for oil; associated gas is present in the oil (1,600 – 1,700 scf/bbl) although no consideration has been given at this stage to the potential for gas sales, or the associated costs. Product Prices • As noted above, no consideration has been given at this stage to the sale of gas from the field, although based on current understanding this may represent a significant future resource. • Oil prices have been modelled as “flat”, with no annual increases (or decreases). A $100 / bbl price was used as a Base Case; no discount was applied for actual price received at the refinery, as the investigation of this aspect of the development was beyond the scope of this preliminary study. Oil price sensitivity was examined over a range of oil prices, from $80 to $120 / bbl (see pages 13 and 17). Capital Costs • Well costs to drill the approximately 4,800 m deep development wells are estimated by Givot to be around $10 million, based on experience with Meged-5 and earlier wells in the field. This is regarded as a “Dry Hole” cost – and a certain number of “failed” wells are assumed in the modelling. • Fracture and completion costs are estimated to be $2.5 million per well. No account has been taken of the economies of scale; an ongoing frac/completion programme involving several wells a year would probably achieve a lower cost • Gas lift is assumed in several of the Scenarios, with costs per well of $2 million. An additional capital cost of $5 million is estimated for central gas compression ga • It is assumed that a Central Processing Facility would be built, comprising a production gathering system, separator, oil stabilization, storage, gas compression etc , but no engineering estimates were available for any such facility. A very rough estimate of $50 million, for a simple facility capable of handling 20,000 bopd and up to 35 MM scf/d gas, has been used as a “place holder” pending the development of engineering estimates. 3 Greensand Associates Ltd • An additional annual capital budget of $5 million has been applied for various “infield” capital projects such as road building, site improvement, field infrastructure etc. •A standard 15% of total Capex has been assumed for Abandonment Costs at the end of the project, if it falls within the 30 year scope of the evaluation model. • Overall, the ‘2P Reserves Case’ of 10.5 MM bbl has a gross development cost of less than $6 / bbl. These metrics are regarded as reasonable on an industry-wide basis, and would compare favourably with many projects world-wide. Operating Costs • Individual well Opex is assumed to be $0.25 million per annum, per active well, plus $1.00 / bbl for “infield” operating costs (process etc) • Transportation and processing costs associated with trucking oil to the refinery is assumed to be $3.00 / bbl, based on information provided by Givot. • At the peak production levels assumed of 16,000 bopd is probable that a pipeline would be justified for transportation to the refinery. This has not however been modelled. • An Operators Fee equal to 4.5% of combined Opex and Capex has been applied The aggregate operating costs are in the range $5 - $6 /bbl in all scenarios. Commercial and Fiscal Terms • We understand that has a Givot 99% working interest in the Meged Field license, which is subject to a Gross Over-riding Royalty of 20.4%, payable to the “General Partner”. Details of this arrangement have not been independently verified by Greensand. • The license is also subject to a 12.5% State Royalty • These Royalty deductions are reflected in the Net Value calculations in the models. It should be noted, however, that in reporting Reserves or Resources net to Givot these royalty obligations should be accounted for, and the “Net Entitlement” Reserves or Resources will be reduced by about 34%. The Royalties are all Gross, with no deductions for Transport and Processing applied. •No tax modelling was done by Greensand Associates. Givot Olam has calculated a post-tax position based on Greensand’s profiles, and the results are summarised on pages 22 and 23 ga Greensand Associates Ltd 4 Summary and Conclusions The results of the analysis are presented in the following pages, and represent three separate Reserves Cases: ‘1P Reserves’; a single well development of the Meged-5, for which drilling costs are regarded as sunk cost 1P Reserves represent the “P90” recoverable oil volumes which are assessed by RDS to have a 90% chance of being exceeded, and which result from an approved (existing) development plan. ‘2P Reserves’; 3 well development corresponding to approved 2011 programme 2P Reserves represent the “P50” recoverable oil volumes which are assessed by RDS to have a 50% chance of being exceeded, and which result from an approved development plan. ‘3P Reserves’; 3 well development corresponding to approved 2011 programme, but with higher recovery per well 3P Reserves represent the “P10” recoverable oil volumes which are assessed by RDS to have a 10% chance of being exceeded, and which result from an approved development plan. Base Case values are shown as NPV10 – the calculated Net Present Value discounted at 10% (a widely accepted industry standard). Results are summarised on page 22. Pages 10 – 12 give the production profiles used. Pages 13-15 give the summary Before Tax cash flows and Pages 16-18 show the full model summaries for the three Reserve cases modelled with $100 oil Conclusions The analysis demonstrates that based on the production profiles provided to us by Givot, the development of the Meged Core Area has robust economics under both the reserve cases examined, and could be a highly profitable venture if the predicted well production volumes prove to be achievable and sustainable. ga Greensand Associates Ltd 5 Qualifications The evaluations in this report are provided by Mr N.J.R Wright. Mr Wright is a Petroleum Geologist by training, with a long career in the international Oil & Gas industry, much of it spent working for Phillips Petroleum Company in the United States, Canada, Norway and the UK. Apart from exploring for oil in basins around the world, he has managed non-operated interests in some major North Sea field development projects and has extensive Commercial experience gained as a portfolio manager and strategic planning director. Since 2004 Mr Wright has acted as consultant to a number of Oil & Gas companies, through his company Greensand Associates Ltd, mainly in the areas of project evaluations and A&D. He also provides technical support and advice to various financial institutions in the City of London, and has worked extensively in the Alternative Investment Market (AIM) of the London Stock Exchange, acting as an advisor to ‘Nomads’ in the Oil & Gas sector. In this capacity, Mr Wright has been involved in the technical Due Diligence, Reserve and Resource verification and Valuations of numerous Oil & Gas companies being brought to the AIM market. Mr Wright is a long-standing member of the American Association of Petroleum Geologists and the Petroleum Exploration Society of Great Britain. ga Greensand Associates Ltd 6 Meged Field Area Meged Non-core Area • ~86 sq km • Meged-2, -3 and -4 wells Meged-4 Meged-3 Meged-2 Meged Core Area • ~50 sq km • > 600 m gross oil column • OOIP ~950 MM bbl • Meged-5 well 2012 well locations (2) Meged-5 ga Greensand Associates Ltd 0 5 km 10 7 Meged Field Approved 2011-2012 Business Plan High Level Schedule 2010 O N D J F M A M 2011 J J A S O N D J F M A M 2012 J J A S O N Meged-5 Meged-5 Frac Testing Meged-5 Production Testing Permitting Production On Production Development Planning Production Test evaluation Permitting Development Plan Field Development (Phase 1) Rig contracting, mobilisation Meged-6 On Production Meged-7 etc ga Greensand Associates Ltd 8 D Meged Field Provisional Economic Analysis Reserves & Resources RDS Report assigns Reserves as follows: 1P 2.6 MM bbl 2P 10.5 MM bbl 3P 16.9 MM bbl Low case profile for development of Meged-5 well only Corresponds to 3 well development plan, including Meged-5 and two wells approved for development in 2012. 3.5 MM bbl per well. 3 well development plan, but with higher recovery of 5.6 MM bbl per well Production Scenarios ga 800 bopd Initial well production per well held initially at 800 bopd with decline adjusted to give 2.6, 3.5 or 5.6 MM bbl recovery as appropriate 1,400 bopd Initial production 1,400 bopd per well 2,000 bopd Initial production 2,000 bopd per well Greensand Associates Ltd 9 Meged Field Provisional Economic Analysis 1P Reserves Analysis – Production Profiles • Initial Production 800, 1400 or 2,000 bopd • 1-2 year plateau • 2.6 MM bbl recovery over 20 years • Single well development of Meged-5 ga Greensand Associates Ltd 10 Meged Field Provisional Economic Analysis 2P Reserves Analysis – Production Profiles • Initial Production 800, 1400 or 2,000 bopd • 1- 4 year plateau • 3.5 MM bbl recovery per well over 20 years • 3 well development • Peak production 2,500 to 5,000 bopd • 10.2 MM bbl recovered over 20 years ga Greensand Associates Ltd 11 Meged Field Provisional Economic Analysis 3P Reserves Analysis – Production Profiles • Initial Production 1,400 or 2,000 bopd • 800 bopd case does not produce the 3P reserves • 2- 4 year plateau • 5.5 MM bbl recovery per well over 20 years • 3 well development • Peak production 4,000 to 6,000 bopd • 16.4 MM bbl recovered over 20 years ga Greensand Associates Ltd 12 Meged Field Provisional Economic Analysis 1P Reserves Scenarios – Before Income Tax Cash Flow Summaries 800 bopd • $100 / bbl oil price (flat) • NPV10 $75 MM • NTER 9.9 • Project is self funding 1,400 bopd • $100 / bbl oil price (flat) • NPV10 $93 MM • NTER 9.9 • Project is self funding 2,000 bopd ga Greensand Associates Ltd • $100 / bbl oil price (flat) • NPV10 $105 MM • NTER 9.9 • Project is self funding 13 Meged Field Provisional Economic Analysis 2P Reserves Scenarios – Before Income Tax Cash Flow Summaries 800 bopd 1,400 bopd 2,000 bopd ga Greensand Associates Ltd • $100 / bbl oil price (flat) • NPV10 $240 MM • NTER 9.9 • Project is self funding after 2012 • $100 / bbl oil price (flat) • NPV10 $279MM • NTER 9.5 • Project is self funding • $100 / bbl oil price (flat) • NPV10 $342 MM • NTER 10.4 • Project is self funding 14 Meged Field Provisional Economic Analysis 3P Reserves Scenarios – Before Income Tax Cash Flow Summaries 800 bopd • Not modelled • 800 bopd well does not recover reserves 1,400 bopd • $100 / bbl oil price (flat) • NPV10 $448 MM • NTER 17.0 • Project is self funding 2,000 bopd • $100 / bbl oil price (flat) • NPV10 $491 MM • NTER 17.0 • Project is self funding ga Greensand Associates Ltd 15 Meged Field - Provisional Economic Model - Before Tax 2011 Sum Wells Drilled Rig 1 Rig 2 Dry holes Net Producers added Type 1 Type 2 Well Count (yr end) Type 1 Type 2 Capex Drilling Frac & Com Artificial Lift Facilities Pipeline Abandonment Total Profile bopd number number number number number number number number 10.0 Annual production MM USD bopd bopd bopd bopd bopd bopd bopd bopd bopd bopd bopd bopd MM bbl Oil Price Gross Revenue Royalties State Royalty Total Royalties Well Opex, per well Opex, $/bbl T and P, $/bbl Total Opex Capex Operators Fee EBITDA Cum Cash Flow 20.4% 12.5% -$32.9 0.25 $1.00 $3.00 $5.82 $6.13 4.5% $54.61 $/bbl $/bbl MM USD MM USD MM USD MM USD MM USD MM USD MM USD MM USD MM USD MM USD MM USD MM USD NPV 10 ($MM) IRR NTER Reserves (MM bbl) Value Metric ($/bbl) BIT $93 #DIV/0! 9.9 2.6 $35.81 Working Interest 99.0% 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 TOTAL 0 0 0 0 1 0 $100 261 -53 -33 -86 -3 -8 -15 -16 -1 142 2014 2015 2016 PHASE 2 2017 2018 2019 PHASE 3 2020 Case 7-2 2021 2022 2023 1P Reserves 2024 2025 2027 2032 2033 2034 2035 2036 2037 2038 2039 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 0.0 2.5 2.5 3.5 1 0 0.0 0.0 0.0 3.5 1 0 0.0 0.0 0.0 0.0 1 0 0.0 0.0 0.0 1 0 0.0 0.0 0.0 1 0 0.0 0.0 0.0 1 0 0.0 0.0 0.0 1 0 0.0 0.0 0.0 1 0 0.0 0.0 0.0 1 0 0.0 0.0 0.0 1 0 0.0 0.0 0.0 1 0 0.0 0.0 0.0 1 0 0.0 0.0 0.0 1 0 0.0 0.0 0.0 1 0 0.0 0.0 0.0 1 0 0.0 0.0 0.0 1 0 0.0 0.0 0.0 1 0 0.0 0.0 0.0 1 0 0.0 0.0 0.0 0 0.0 0.0 0.0 0 0.0 0.0 0.0 0 0.0 0.0 0.0 0 0.0 0.0 0.0 0 0.0 0.0 0.0 0 0.0 0.0 0.0 0 0.0 0.0 0.0 0 0.0 0.0 0.0 0 0.0 0.0 0.0 0 0.0 0.0 0.0 0 0.0 0.0 0.0 8.5 3.5 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 700 1,400 0 1,099 0 0 863 0 0 0 677 0 0 0 0 532 0 0 0 0 0 417 0 0 0 0 0 0 328 0 0 0 0 0 0 0 257 0 0 0 0 0 0 0 0 700 0.26 1,400 0.51 1,099 0.40 863 0.31 677 0.25 532 0.19 417 0.15 328 0.12 257 0.09 202 0 0 0 0 0 0 0 0 0 202 0.07 158 0 0 0 0 0 0 0 0 0 158 0.06 124 0 0 0 0 0 0 0 0 0 124 0.05 98 0 0 0 0 0 0 0 0 0 98 0.04 77 0 0 0 0 0 0 0 0 0 77 0.03 60 0 0 0 0 0 0 0 0 0 60 0.02 47 0 0 0 0 0 0 0 0 0 47 0.02 37 0 0 0 0 0 0 0 0 0 37 0.01 29 0 0 0 0 0 0 0 0 0 29 0.01 23 0 0 0 0 0 0 0 0 0 23 0.01 18 0 0 0 0 0 0 0 0 0 18 0.01 4 4.0 0 0 0 0 0 0 0 0 0 0 0 0 0.00 0.0 0 0 0 0 0 0 0 0 0 0 0 0 0.00 0.0 0 0 0 0 0 0 0 0 0 0 0 0 0.00 0.0 0 0 0 0 0 0 0 0 0 0 0 0 0.00 0.0 0 0 0 0 0 0 0 0 0 0 0 0 0.00 0.0 0 0 0 0 0 0 0 0 0 0 0 0 0.00 0.0 0 0 0 0 0 0 0 0 0 0 0 0 0.00 0.0 0 0 0 0 0 0 0 0 0 0 0 0 0.00 0.0 0 0 0 0 0 0 0 0 0 0 0 0 0.00 0.0 0 0 0 0 0 0 0 0 0 0 0 0 0.00 100 25.6 -5.21 -3.19 -8.41 -0.25 -0.26 -0.77 -1.27 -8.50 -0.44 7 7 100 51.1 -10.42 -6.39 -16.81 -0.25 -0.51 -1.53 -2.29 -3.50 -0.26 28 35 100 40.1 -8.18 -5.01 -13.20 -0.25 -0.40 -1.20 -1.85 0.00 -0.08 25 60 100 31.5 -6.42 -3.94 -10.36 -0.25 -0.31 -0.94 -1.51 0.00 -0.07 20 80 100 24.7 -5.04 -3.09 -8.13 -0.25 -0.25 -0.74 -1.24 0.00 -0.06 15 95 100 19.4 -3.96 -2.43 -6.38 -0.25 -0.19 -0.58 -1.03 0.00 -0.05 12 107 100 15.2 -3.11 -1.90 -5.01 -0.25 -0.15 -0.46 -0.86 0.00 -0.04 9 116 100 12.0 -2.44 -1.49 -3.93 -0.25 -0.12 -0.36 -0.73 0.00 -0.03 7 124 100 9.4 -1.91 -1.17 -3.09 -0.25 -0.09 -0.28 -0.63 0.00 -0.03 6 129 100 7.4 -1.50 -0.92 -2.42 -0.25 -0.07 -0.22 -0.54 0.00 -0.02 4 134 100 5.8 -1.18 -0.72 -1.90 -0.25 -0.06 -0.17 -0.48 0.00 -0.02 3 137 100 4.5 -0.93 -0.57 -1.49 -0.25 -0.05 -0.14 -0.43 0.00 -0.02 3 140 100 3.6 -0.73 -0.45 -1.17 -0.25 -0.04 -0.11 -0.39 0.00 -0.02 2 141 100 2.8 -0.57 -0.35 -0.92 -0.25 -0.03 -0.08 -0.36 0.00 -0.02 1 143 100 2.2 -0.45 -0.27 -0.72 -0.25 -0.02 -0.07 -0.34 0.00 -0.02 1 144 100 1.7 -0.35 -0.22 -0.57 -0.25 -0.02 -0.05 -0.32 0.00 -0.01 1 145 100 1.4 -0.28 -0.17 -0.45 -0.25 -0.01 -0.04 -0.30 0.00 -0.01 1 146 100 1.1 -0.22 -0.13 -0.35 -0.25 -0.01 -0.03 -0.29 0.00 -0.01 0 146 100 0.8 -0.17 -0.10 -0.27 -0.25 -0.01 -0.03 -0.28 0.00 -0.01 0 146 100 0.7 -0.13 -0.08 -0.22 0.00 -0.01 -0.02 -0.03 0.00 0.00 0 147 100 0.0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 -4.00 -0.18 -4 142 100 0.0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 142 100 0.0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 142 100 0.0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 142 100 0.0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 142 100 0.0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 142 100 0.0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 142 100 0.0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 142 100 0.0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 142 100 0.0 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0 142 Meged Field Gross Cash Flow Capex Total Opex Total Royalties Gross Revenue EBITDA Cum Cash Flow 40 Production Profile 1,600 1,400 30 1,200 bopd 1,000 10 800 600 '2040 '2039 '2038 '2037 '2036 '2035 '2034 '2033 '2032 '2031 '2030 '2029 '2028 '2027 '2026 '2025 '2024 '2023 '2022 '2021 '2020 '2019 '2018 '2017 '2016 '2015 -10 '2014 0 '2013 $/bbl $6.13 $4.60 $5.82 $32.90 2040 0 '2012 $ MM $142 $114 $93 $78 $67 2031 0 '2011 NPV Sensitivity 0% 5% 10% 15% 20% 2030 0 $ MM $ MM $16 $12 $15 $86 2029 0 50 1.8 Undiscounted $/bbl analysis Total Capex Capex exc. Aband Total Opex Total Royalty Total Tax 2028 0 20 Net Entitlement Reserves (MMBBL) $100 Oil Price IP 1400 bopd 2026 0 1 0 0 0.0 2.5 2.5 7.0 0.0 4.0 16.0 0.0 2.6 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 2.6 2.6 2.6 MM bbl (Meged-5 well) 2012 2013 PHASE 1 400 200 0 -20 Year -30 16 17 18 Meged Field Provisional Economic Analysis Summary Scenari o Reserve s Case Recovery /well MMbbl Well Initial Prod bopd Number of wells NPV10 (BIT) $ MM $80 oil $100 oil NPV10 (AIT) $ MM * $80 oil $100 oil Rec. Resources MM bbl Gross Net Entit’nt 2.6 1.8 2.6 1.8 7-1 1P 2.6 800 1 56 75 7-2 1P 2.6 1400 1 71 93 7-3 1P 2.6 2000 1 80 105 2.6 1.8 5-1 2P 3.4 800 3 178 240 10.2 6.8 5-2 2P 3.4 1400 3 208 279 10.2 6.8 5-3 2P 3.4 2000 3 258 342 10.2 6.8 8-1 3P 5.5 800 3 (254) (337) 16.4 11.0 8-2 3P 5.5 1400 3 342 448 16.6 11.1 8-3 3P 5.5 2000 3 375 491 16.5 11.1 58 173 243 77 217 293 * Tax calculations by Givot Olam ga Greensand Associates Ltd 19 Tax Calculations by Givot Olam – 1400 bopd cases, $100 oil 1P Givot (99%) Gross Production (100%) MM bbl Working interest % Working interest revenue $M Royalties - State $M Royalties - Interested 3rd. Party $M Royalties - Total $M Capital Costs $M Abondonment $M Operating Expenses $M Cash flow before Levy & Corporation $M Tax Discounted at 0% Oil Profits Levy Rate % Oil Profits Levy Base $M Oil Profits Levy $M Cash flow after Levy & before $M Corporation Tax Discounted at 0% Corporation Tax $M Discounted cash flow after Levy & Corporation Tax at 0% $M at 5% $M at 10% $M at 15% $M at 20% $M 2011 0.26 2012 0.51 2013 0.40 2014 0.31 2015 0.25 2016 0.19 2017 0.15 2018 0.12 2019 0.09 2020 0.07 2021 0.06 2022 0.05 2023 0.04 2024 0.03 2025 0.02 2026 0.02 2027 0.01 2028 0.01 2029 0.01 2030 0.01 2031 0.00 2032 0.00 2033 0.00 2034 0.00 2035 0.00 2036 0.00 2037 0.00 2038 0.00 2039 0.00 2040 0.00 25.3 3.2 5.2 8.32 8.4 0.0 1.7 50.6 6.3 10.3 16.6 3.5 0.0 2.6 39.7 5.0 8.1 13.1 0.0 0.0 1.9 31.2 3.9 6.4 10.3 0.0 0.0 1.6 24.5 3.1 5.0 8.1 0.0 0.0 1.3 19.2 2.4 3.9 6.3 0.0 0.0 1.1 15.1 1.9 3.1 5.0 0.0 0.0 0.9 11.8 1.5 2.4 3.9 0.0 0.0 0.8 9.3 1.2 1.9 3.1 0.0 0.0 0.7 7.3 0.9 1.5 2.4 0.0 0.0 0.6 5.7 0.7 1.2 1.9 0.0 0.0 0.5 4.5 0.6 0.9 1.5 0.0 0.0 0.5 3.5 0.4 0.7 1.2 0.0 0.0 0.4 2.8 0.3 0.6 0.9 0.0 0.0 0.4 2.2 0.3 0.4 0.7 0.0 0.0 0.4 1.7 0.2 0.3 0.6 0.0 0.0 0.3 1.3 0.2 0.3 0.4 0.0 0.0 0.3 1.1 0.1 0.2 0.3 0.0 0.0 0.3 0.8 0.1 0.2 0.3 0.0 0.0 0.3 0.6 0.1 0.1 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 4.0 0.2 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 6.85 27.93 24.71 19.34 15.13 11.82 9.22 7.18 5.58 4.33 3.34 2.57 1.96 1.48 1.11 0.81 0.58 0.40 0.26 0.41 -4.14 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0% 15.71 - 0% 31.67 - 0% 24.81 - 0% 19.42 - 0% 15.19 - 0% 11.87 - 0% 9.27 - 0% 7.22 - 0% 5.62 - 0% 4.36 - 0% 3.37 - 0% 2.59 - 0% 1.98 - 0% 1.50 - 0% 1.12 - 0% 0.83 - 0% 0.60 - 0% 0.42 - 0% 0.27 - 0% 0.41 - 0% - 0% - 0% - 0% - 0% - 0% - 0% - 0% - 0% - 6.85 27.93 24.71 19.34 15.13 11.82 9.22 7.18 5.58 4.33 3.34 2.57 1.96 1.48 1.11 0.81 0.58 0.40 0.26 0.41 -4.14 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 2.35 6.98 5.21 3.84 2.82 2.16 1.50 1.23 1.00 0.78 0.60 0.46 0.35 0.27 0.20 0.15 0.10 0.07 0.05 0.07 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 Total 0.25 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 110.65 92.78 79.35 69.12 61.16 4.50 4.44 4.39 4.34 4.30 20.94 19.95 19.04 18.21 17.45 19.50 17.69 16.12 14.75 13.54 15.50 13.39 11.64 10.19 8.97 12.31 10.13 8.41 7.04 5.94 9.66 7.57 6.00 4.80 3.88 7.72 5.76 4.36 3.34 2.58 5.95 4.23 3.05 2.24 1.66 4.58 3.10 2.14 1.50 1.06 3.55 2.29 1.50 1.01 0.69 2.74 1.68 1.06 0.68 0.44 2.10 1.23 0.74 0.45 0.28 1.61 0.89 0.51 0.30 0.18 1.21 0.64 0.35 0.20 0.11 0.91 0.46 0.24 0.13 0.07 0.67 0.32 0.16 0.08 0.04 0.48 0.22 0.10 0.05 0.03 0.33 0.14 0.06 0.03 0.01 0.21 0.09 0.04 0.02 0.01 0.33 0.13 0.05 0.02 0.01 -4.14 -1.56 -0.62 -0.25 -0.11 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 99% 0% (3.96) - 2P 3P 20 Glossary & Abbreviations AIT bbl BIT bopd Capex Completion CT Frac Gas Lift m MM MM bbl NPV10 NTER OOIP Opex pa RDS scf scf/d sq km ga After Income Tax Barrel of oil Before Income Tax Barrels of oil per day Capital Expenditure The process and/or equipment involved in converting a well bore into a producing oil (or gas) well Corporation Tax Hydraulic fracturing of a well, in order to increase hydrocarbon flow rates from poor quality reservoir rock Method of artificial lift in an oil well, involving the injection of natural gas into the oil column in the wellbore to lighten the column and increase flow Metre Million (106) Million barrels of oil Net Present Value, based on 10% annual discounting Net Total Earnings Ratio Original Oil In Place Operating Expenditure, normally defined on an annual basis per annum Helix RDS, an Aberdeen based petroleum consultancy owned by Baker Hughes International Standard Cubic Feet (of gas) Standard Cubic Feet per day Square kilometre Greensand Associates Ltd 21
